SEC views meme coins as non-securities, while Musk compares them to a casino.
In a significant move, the United States Securities and Exchange Commission (SEC) has announced that most meme coins will not be considered securities, marking a departure from previous approaches that broadly applied securities laws to many crypto assets [1][3]. This decision, led by SEC Chairman Paul Atkins, reflects a more permissive and clear regulatory framework for meme coins.
Chairman Atkins has emphasised that "most crypto assets are not securities" and has tasked SEC staff with developing clear guidelines and rules of the road for market participants to determine when a digital asset qualifies as a security under the Howey test and when it does not [3]. This includes creating purpose-fit disclosures, exemptions, and safe harbors for certain crypto activities such as initial coin offerings (ICOs), airdrops, and network rewards—areas often associated with meme coin launches.
The SEC's aim is to foster an environment that encourages innovation and competition, enabling intermediaries and trading platforms to offer both securities and non-securities digital assets under unified licensing structures sometimes called “super-apps,” which would facilitate meme coin trading alongside other crypto assets [4].
However, not all SEC commissioners agree with this relaxed approach towards meme coins. Commissioner Andrew Crenshaw has expressed reservations, arguing that many meme coins might still fit the definition of securities under existing laws and should be regulated as such to protect investors [1][4]. Crenshaw asserts that most meme coins rely on managerial efforts, such as limiting supply, buybacks, burning, manipulation through pump-and-dumps and rug pulls, and getting a listing on an exchange.
Here's a summary of the differing viewpoints:
| Aspect | SEC Majority (Chairman Atkins) | Commissioner Crenshaw (Dissent) | |-------------------------------|-------------------------------------------------------|--------------------------------------------------| | Classification of Meme Coins | Most are not securities; fewer regulatory barriers | Meme coins often are securities; need regulation | | Regulatory Approach | Developing clear guidelines, safe harbors, and exemptions to facilitate innovation and adoption | Advocates for stringent application of securities law for investor protection | | Innovation & Market Impact | Supports “super-apps” and flexible frameworks balancing innovation with oversight | Cautions against lax regulation that could harm investors |
This regulatory stance reflects an ongoing evolution in how the SEC is managing crypto assets as of mid-2025, tending toward greater clarity and market efficiency while balancing risks through nuanced rulemaking and stakeholder guidance [1][3][4]. Commissioner Crenshaw, however, raises concerns about the potential erosion of the SEC's ability to police fraudulent Ponzi schemes and the possibility of giving special treatment to crypto assets over traditional assets.
[1] SEC Regulatory Stance on Meme Coins: A Shift Towards Clarity [2] Meme Coins and the SEC: A Closer Look [3] SEC Chairman Atkins' Vision for a Clear Crypto Asset Regulatory Framework [4] The Role of "Super-Apps" in the SEC's Crypto Asset Regulatory Strategy
- The SEC's new approach to meme coins, led by Chairman Paul Atkins, aims to develop clear guidelines and rules for market participants to determine if a digital asset is a security under the Howey test or not.
- SEC Chairman Atkins has tasked his staff with creating purpose-fit disclosures, exemptions, and safe harbors for certain crypto activities such as initial coin offerings (ICOs), airdrops, and network rewards.
- The SEC's goal is to foster an environment that encourages innovation and competition, enabling intermediaries and trading platforms to offer both securities and non-securities digital assets under unified licensing structures like "super-apps," which would facilitate meme coin trading alongside other crypto assets.
- Commissioner Andrew Crenshaw, on the other hand, argues that many meme coins might still fit the definition of securities under existing laws and should be regulated as such to protect investors.
- Commissioner Crenshaw contends that most meme coins rely on managerial efforts, such as limiting supply, buybacks, burning, manipulation through pump-and-dumps and rug pulls, and getting a listing on an exchange, thus necessitating stricter application of securities law for investor protection.
